Mark Carney is about to administer the last rites to forward guidance. The major policy initiative introduced by the new governor of the Bank of England six months ago is dead and buried. Forward guidance RIP.

That, broadly, is how the City sees the current state of monetary policy in the UK. The framework set up six months ago is about to be dismantled.

So what is going on? The honest answer is that nobody really knows, not even Carney, who is only one of nine members of the Bank's monetary policy committee. The other eight members may have different views from that of the governor.

Presumably that was why the Bank was saying that all options are on the table. These include scrapping the idea entirely and going back to the old system of inflation targeting that existed under the previous governor, Mervyn King; adopting the system used by the Federal Reserve in which there is a commitment not to tighten policy until unemployment has fallen to a lower but unspecified rate; or to lower the threshold at which higher borrowing costs from 7% to a lower figure.

Carney's original plan was to keep interest rate increases off the table until the jobless rate hit 7%. Back in August 2013 that was seen as unlikely until early 2016.

The reason 7% was chosen was that the Bank considered 6.5% to be the medium term equilibrium rate for unemployment – the level consistent with stable inflation – and it added an extra 0.5 points for safety.

Events of the past few months have forced the Bank to change its view. Unemployment is already within a whisker of 7%, and yet there has been no sign of the economy overheating either from wages or from the headline inflation rate. As a result, Carney told a British business lunch in Davos that the medium-term equilibrium unemployment rate was now lower than 6.5%.

He didn't say what he thought the equilibrium rate was, however, and there is a good reason for that. He doesn't know. This was always going to be a problem with the form of forward guidance chosen by the Bank: there doesn't appear to be a solid long-term relationship between unemployment and inflation in the UK.

Carney would clearly find it deeply embarrassing to have to admit in next month's inflation report that he is abandoning his baby after just six months. Yet it is clear from a speech by Martin Weale, one of the independent members of the MPC, that there is opposition to lowering the threshold from 7%.

Weale makes the reasonable point that if the Bank did that, it could find itself in the same position as it is now were unemployment to continue falling rapidly.

Whatever happens, Carney will want to secure consensus on the MPC. If the minutes of the February MPC meeting showed the committee deeply split over what to do the result would be an immediate and serious loss of credibility for Threadneedle Street.

Market interest rates would start to rise, which is the one thing all the MPC members say they want to avoid. So they will have to find a way of communicating that to the markets. It will be forward guidance but not as we know it.